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Canada is ready for talks with U.S. about updating NAFTA, Freeland says

Trump has formally launched the process that triggers talks with Canada and Mexico. The 90-day countdown period has started.

Foreign Affairs Minister Chrystia Freeland says the labour and environment chapters of NAFTA could benefit from renegotiation. The U.S. officially served notice Thursday of its intention to renegotiate the trade agreement.

OTTAWA—Canada says it’s ready to talk now that U.S. President Donald Trump has formally launched the process to renegotiate the North American Free Trade Agreement.

Foreign Affairs Minister Chrystia Freeland said Thursday that Ottawa has already decided that updating the environment and labour sections of the trade pact will be two areas of focus going into the negotiations.

“I’m not going to lay all my cards on the table now. I don’t think Canadians would like us to do that,” Freeland told reporters Thursday.

“We’re going to take a very thoughtful and very strategic approach to the negotiations, but two areas that I think could very usefully benefit from modernization in NAFTA are the labour and environment chapters,” Freeland said, citing the experience with the recently completed trade deal with the European Union.

She noted that in letters to Congress to trigger the process for renegotiation, U.S. Trade Representative Robert Lighthizer also flagged those two areas, among others.

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“So that’s an example of some areas where I think we can do some really constructive work together,” she said.

U.S. Trade Representative Robert Lighthizer say the U.S. is "going to give renegotiation a good strong shot,” noting that NAFTA needs to better protect American factory workers and to reflect new technologies. (Evan Vucci / The Associated Press)

Lighthizer’s notice to Congress Thursday set the clock ticking on the start of negotiations, saying they would begin as soon as possible but no sooner than 90 days.

In the letter, Lighthizer — who gave Canada advance notice of the move, according to Freeland — said that elements of the 25-year-old deal are “outdated” and “do not reflect modern standards.”

Lighthizer’s letter set out some elements of the trade deal that the U.S. would like to see modernized, including intellectual property rights and regulatory practices.

Freeland said that Ottawa has a similar view and she tried to paint the renegotiation of the sweeping trade agreement as “routine.”

The foreign affairs minister said the formal triggering of NAFTA talks has “long been anticipated” and said the federal government has already started to consult with Canadian stakeholders about Ottawa’s priorities going into the talks.

In April, U.S. President Donald Trump said he would renegotiate the North American Free Trade Agreement with Canada and Mexico.

Freeland declined to speculate about Washington’s ambition to complete negotiations by the end of the year, saying any talk of timelines was “premature.”

“What I will say is we are ready to roll up our sleeves—we have been from day one—and we will work hard and seriously on updating this essential agreement. At the end of the day, our objective is going to be to negotiate a great deal for Canadians, and I’m very confident we can do that,” she said.

Lighthizer said that the United States seeks to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities under NAFTA.

And he said that “aggressive enforcement of the commitments made by our trading partners” was vital and needed to be improved.

“We are committed to concluding these negotiations with timely and substantive results for U.S. consumers, businesses, farmers, ranchers, and workers,” he said.

The letter makes good on a key campaign promise by Trump, who came into office on a protectionist agenda, vowing to revive the U.S. manufacturing sector and lure back jobs that had gone offshore.

The development, though not a surprise, does formally set the stage for potentially difficult negotiations between the U.S., Canada and Mexico.

While Trump told Prime Minister Justin Trudeau in February that he was only looking to “tweak” trade ties between Canada and the U.S., more recently he has come out swinging against NAFTA.

“NAFTA has been a horrible deal for the United States. It’s been very good for Canada, it’s been very good for Mexico, but it’s been horrible for the United States,” Trump said in late April.

At that time, Trump had threatened to pull out of NAFTA altogether but said he backed away after talking to Trudeau and Mexican President Enrique Pena Nieto, who impressed on him the economic turmoil that such a move would cause.

“Now, if I’m unable to make a fair deal, if I’m unable to make a fair deal for the United States, meaning a fair deal for our workers and our companies, I will terminate NAFTA. But we’re going to give renegotiation a good, strong shot,” Trump said.

Freeland said that Canada goes into the talks looking to renew the trade deal with both the U.S. and Mexico at the table, dampening talk that Washington might want only bilateral deals.

“NAFTA is a trilateral agreement, and so the negotiations to modernize NAFTA need to be conducted in a trilateral fashion,” Freeland said.

Indeed, Freeland will be travelling to Mexico City next Tuesday for talks with Ildefonso Guajardo, Mexico’s economy minister, and Foreign Secretary Luis Videgaray, in part about the NAFTA deal.

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